89% still trust centralized custodians despite 2022 collapses: Survey
US crypto users haven’t lost trust in “intermediaries” to hold their crypto, with a Paxos survey in January suggesting that a majority of US crypto hodlers still rely on banks, exchanges and mobile payment apps to deposit their assets.
An annual online survey published on March 7 by the stablecoin issuer, conducted between January 5 and January 6, sought to understand how the crypto winter and “major industry fallout” in 2022 – including FTX and Alameda Research – affected consumer behavior and trust in the crypto ecosystem . Paxos noted:
“2022 was a rollercoaster year for the crypto industry.”
“Everything from some of the highest Bitcoin prices ever to some of the lowest, large-scale industry fallout from companies like Terra, FTX, Alameda Research and more – it was a volatile and potentially confidence-testing year for the ecosystem,” it added.
After a turbulent end to 2022, crypto consumers have remained confident for 2023. We conducted a consumer survey and found many reasons why crypto is still viewed as a primary staple of financial livelihood. Read our full survey here: pic.twitter.com/TZcmct0O5L
— Paxos (@PaxosGlobal) March 7, 2023
However, the survey found that of those who heard and followed the FTX saga, more than half (57%) of respondents either planned to buy more crypto or simply did nothing as a result of the news.
It also found that 89% of respondents still trusted “intermediaries” such as “banks, crypto exchanges and/or mobile payment apps” to hold their crypto, saying:
“Indeed, despite the high-profile collapses and underlying poor risk management practices seen in several crypto companies, crypto owners still rely on intermediaries to hold crypto on their behalf.”
The survey also found more consumer desire to be able to buy Bitcoin (BTC), Ether (ETH) and other digital assets from households or traditional banks, with 75% of respondents indicating they were “likely or very likely” to buy crypto from their “primary bank” if offered, an increase of 12 percentage points from the previous year.
“In addition, 45% of respondents reported that they would be encouraged to invest more in crypto if there was more mainstream adoption by banks and other financial institutions,” Paxos added.
It said a “significant untapped opportunity” exists for banks if they expand their digital asset offerings. “Not only would these services satisfy growing demand, but they would also result in higher engagement,” claimed Paxos.
Related: Paxos is engaged in “constructive discussions” with the SEC: Report
Respondents qualified for the survey if they lived in the United States, were over the age of 18, had a combined household income of over $50,000 and purchased cryptocurrency once in the past three years. The survey recruited 5,000 participants.
“Despite the volatile crypto landscape in 2022, consumers did not lose faith in their crypto investments. This figure was unchanged from last year’s report, underscoring the long-term confidence of those participating in the crypto markets,” Paxos wrote.
However, the timing of the survey means that the results obtained did not take into account recent crypto headwinds, such as the bankruptcy of crypto lender Genesis, the crackdown on Binance USD (BUSD) involving Paxos and the financial uncertainty of crypto bank Silvergate Capital.